“It seems like sales are dropping like a rock,” said Phil Smoley, owner broker of CPS Country Air Properties. “But like a bungee chord, the farther it drops the harder and faster it will rebound.”

There is no way to know how long this trend will continue. Some markets in the country have bottomed out, others are still plummeting. All indications in Lake County show that prices may have bottomed out however savvy buyers are taking advantage of the low prices while they can before prices go back up.

"Sales continue to be dragged down by the ongoing effects of both the credit/liquidity crunch and tighter underwriting standards that have reduced the pool of qualified buyers who can obtain a loan," said California Association of Realtors (CAR) President William E. Brown.

"It is crucial that FHA reform legislation currently under consideration by Congress includes higher loan limits for high-cost states like California," he said. "The proposed legislation also includes a reduction in the down payment requirement for FHA loans and will include condominiums in the FHA single-family program, which will make it easier for buyers in the condominium market to qualify for loans."

Closed escrow sales of homes in Lake County totaled 33 in March according to the MLS. Countywide home sales activity decreased 51.5 percent from March 2007.

The median price of a home in Lake County during March 2008 was $225,000, a 23.2-percent decrease from the revised $293,000 median for March 2007, the MLS reported. The March 2008 median price increased 4.8 percent compared with February’s $220,000 median price.

"The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market," said CAR Vice President and Chief Economist Leslie Appleton-Young. "However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year."

Highlights of Lake County’s housing figures for March 2008:

• Lake County’s Unsold Inventory Index for homes in March 2008 was 31.9 months, compared with 17.4 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

• Thirty-year fixed-mortgage interest rates averaged 5.85 percent during March 2008, compared with 6.29 percent in March 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.24 percent in March 2008, compared with 5.51 percent in March 2007.

• The average number of days it took to sell a single-family home was 165 days in March 2008, compared with 153 for the same period a year ago.

Ray Perry is a Realtor with CPS Country Air Properties, telephone 277-8000.

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tom - bungee cord Registered | 04-22-2008 12:22:10 I like your bungee cord reference. Anything to bring some hope into the market ( I have a house for sale). Hopefully this huge downturn is a silver lining to people who have been renters most of their lives. Unfortunately, the opportunity is there, but a majority of potential buyers have less than good FICO ratings. This in a country that has a negative savings rate - so no surprise that even with historic housing price lows, people are sitting impotently on the sidelines. Tooooo much debt!

Donna Christopher - I too like the bungee Author | 04-23-2008 17:17:48 cord analogy. Just make sure you've measured the bungee right and your drop right. Ever see the ones where the calculation on either was off just a hair - splat. Anyone that claims to know where the bottom of this market is may well have a bridge to sell you also.

rsun - Prices Registered | 04-24-2008 00:23:30 I too like your bungee cord reference. However, prices of homes, though more affordable is still too high for most of the home buyers today. With the gas prices in the upward climb, we have experienced price increases in most all sectors of consumer goods which includes transportation, food, and dispensables. It takes energy to run a home, a business, and agriculture, etc. so there is not much free cash left over for most individuals after one pays their monthly bills. If homes were to get into the high $100,000 range we might see some more agressive sales. Low interest rates help but if you cannot qualify, you cannot get a loan. I hope we get our economy turned around!

jmadison - Bungee is wishful thinking Registered | 05-02-2008 11:48:17 It is going to get a lot worse before it gets better. How can the economy turn around when we have no end in sight to the war in Iraq. If we end up with a president that continues to spend outrageous money on war we will see our economy continue to slide. Not to mention how we have destabilized the middle east which plays a large role in the high cost of oil.

CobbMt Registered | 05-05-2008 21:39:50 My My - Looks like the bungee jumper hit his head to hard on a rock, then boinged back. With gas over 4 bucks a gallon, and higher by a bunch on the lake, you can kiss this county as a commuter haven bye bye. My SUV gets 13MPG. So the Santa Rosa and back commute now costs over 40 dollars bye 5, then by 20. Lost ya - that is 800 a month on gas, for the year at least $10000 a year. Lake County always ebbs and flows, and this time again it will be in the toliet, like all the other rural areas in the state. If I can sell my home, it is for sale, I can pay an additional 600 per month without the commute to Ukiah. I doubt folks will sell in Ukiah to move to Kelseyville, to save money on the home, and pay more on the gas. This reminds me of the WIN buttons from that nice compasionate republican President Ford. Remember 18 pertcent loans, oh WIN = Whip inflation now. While it is cheaper to buy a home than build a home, the loss is a recipe for more rural poor here in Lake County. And on and on.

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